Cross-border program extended two years

A highly controversial cross-border trucking demonstration project--which allows up to 100 Mexican carriers to operate beyond the U.S. border commercial zones and up to 100 U.S. carriers to operate throughout Mexico--has been extended for two years to the maximum three years allowed by statute as a pilot program

Justin Carretta, online news editor | Aug 05, 2008

A highly controversial cross-border trucking demonstration project--which allows up to 100 Mexican carriers to operate beyond the U.S. border commercial zones and up to 100 U.S. carriers to operate throughout Mexico--has been extended for two years to the maximum three years allowed by statute as a pilot program. The project was initially set to expire on September 6th of this year.

U.S. Secretary of Transportation Mary Peters and Mexico Secretary of Communications and Transportation Luis Tellez Kuenzler initially agreed to the project in February 2007, which was enacted that September and expected to last one year.

However, according to Federal Motor Carrier Safety Administrator John H. Hill, a number of potential carriers would not invest the time and resources (including obtaining insurance necessary to operate in the U.S.) needed to participate as they were unsure of the project’s longevity. At the present time, only 27 Mexican carriers with 107 trucks are operating in the U.S. and 10 U.S. carriers with 55 trucks are operating in Mexico, Hill said.

"We intend this extension to reassure trucking companies that they will have sufficient time to realize a return on their investment, and we anticipate additional participation with this extra time,” Hill said. “The extension will ensure that the demonstration project can be reviewed and evaluated on the basis of a more comprehensive body of data.

According to the U.S. DOT, since 1982 trucks from Mexico have been able to drive in a 25-mile commercial zone along the U.S. border, but cargo destined beyond that point must be off-loaded and transferred. According to DOT, transferring products from the truck of one country to that of the other costs consumers $400 million each year.

The cross-border program has been supported by a number of agricultural and business organizations, including the American Trucking Assns., Caterpillar and the National Association of Manufacturers, which were among 69 organizations to sign a statement in March that claimed blocking the program would cause Mexico to retaliate against U.S. products entering Mexico.

“In 2001, a NAFTA dispute-settlement panel unanimously ruled that the blanket exclusion of Mexican trucking firms violated U.S. obligations under the NAFTA,” the statement said. “The ruling gave Mexico the right to retaliate against U.S. products entering Mexico. It is estimated Mexican retaliation against U.S. products could be as much as $2 billion per year. Fortunately, Mexico refrained from retaliation. However, if the pilot trucking program is blocked, we expect Mexico to exercise its right to retaliate. Retaliation of this magnitude could wipe out a broad swath of U.S. exports to Mexico and related U.S. jobs.”

“DOT has consistently bent over backwards to force this program on the public,” said OOIDA executive vp Todd Spencer. “They seem oblivious to the inherent safety and security risks of what they are trying to do.”

“Now, just days after the Committee on Transportation and Infrastructure approved a bipartisan bill to hold the DOT to its original plan and terminate this pilot program after one year, the Federal Motor Carrier Safety Administration announces its intent to extend this program for two more years,” Oberstar said. “When Congress reconvenes in September, I intend to have the full House of Representatives approve our bill as quickly as possible, and make certain that the voice of Congress is heard loud and clear at the Department of Transportation and that this program is finally shut down.”